Posts Tagged ‘David Cameron’

George Osborne, who I used to call The Fat Controller, has become the Thin Controller after eating less and running more. But he is still Sir Topham Hat, insensitive nemesis of poor Thomas the Tank Engine (and all other members of the working classes).

In case you missed the Thin Controller’s latest, last week he decided to reduce taxes for the rich and the middle classes at the same time as chopping a further £4.4 billion over five years from the budget to support disabled people. The Institute for Fiscal Studies estimated that 370,000 people with a disability would lose an average of £3,500 a year. This comes on the back of an already-implemented big squeeze on various direct and indirect forms of welfare support for the disabled.

Most of the groundswell of anger at the Thin Controller — he has already abandoned the disability benefit cut in a standard ‘oh my god, what have I done this time?’ volte-face — focused on his increase to the level at which higher earners begin to pay the 40 percent income tax rate. However this change has at least the merit of rewarding middle class work.

What gob-smacked me in the Thin Controller’s budget was the decision to make big cuts to already ridiculously low rates (compared to income tax rates on work) of Capital Gains Tax (CGT). Britain is fast becoming a rentier society, but the Thin Controller’s determination to turn us into some proto-feudal squirearchy seems to know no bounds. He cut the lower band of CGT from 18 percent to 10 percent, and the higher rate from 28 percent to 20 percent.

The old rates do remain in force for profits on one’s second, third, fourth and fifth, etc homes (i.e. for non-primary real estate). However the adjustment is a huge bung to the share- and bond-owning leisure class, of which I regard myself as an aspiring member. Thinking today about whether I should not perhaps take the next three months off and go on safari, I decided to check the HM Revenue and Customs web site and learn more about the Thin Controller’s commendable policy to encourage my indolence. Here is what I found:

<Policy objective>

<The government wants to create a strong enterprise and investment culture. Cutting the rates of CGT for most assets is intended to support companies to access the capital they need to expand and create jobs. Retaining the 28% and 18% rates for residential property is intended to provide an incentive for individuals to invest in companies over property.>

This statement has three great qualities. First, it is pure gibberish. Companies (the supposed subject of the second sentence) do not pay CGT, they pay Corporation Tax. Second, it is dishonest. Following from 1., what the Thin Controller really means is that he wants to support the stock-owning rentier class, who don’t need to work because tax rates on passive capital invested in shares and bonds were already low, and are now even lower. Annoyingly, he can’t actually say this, but we know who we are. Third, the statement is misguided. This is because no British rentier with half a brain is going to invest much of their unearned capital in British companies when the Thin Controller has created such an anaemic growth environment. One gives one’s capital to American companies like Apple, Amazon, Skyworks, Gilead, Amtrust Financial Services, American Express, American Tower, Verisk Analytics, and so on. (Disclaimer: oh yes, I own them all.) And then one pays sod all tax to the Thin Controller on the profits. Of course, in the final analysis this doesn’t matter because the Thin Controller doesn’t need the tax because he’s dismantling the welfare state.

I recently mentioned a compelling new edition of Han Suyin’s beautiful novel And the Rain My Drink, about British conduct in the war against communist insurgency in Malaya after the Second World War.

As luck would have it, writing about British colonial perfidy seems to be the genre du jour, as one of my very favourite journalists, Ed Vulliamy (never met him), files a long investigative report about British conduct in Greece from late 1945 on. It is much the best thing I have read in The Observer for some time, and completely free.

Add a couple more case studies from South Africa, Kenya or Ireland, and we have the beginnings of a joined-up history of British colonialism.

That said, there are marks on both sides of the ledger. As Brave Dave Cameron observed on his visit to India last year: ‘I think there is an enormous amount to be proud of in what the British empire did and was responsible for. But of course there were bad events as well as good events. The bad events we should learn from and the good events we should celebrate.’

He’s right. The Carry On movies were tremendous, a real boon to my childhood. And It Ain’t Half Hot, Mum, not bad either.

Blogroll

Baseline Scenario
About the US economy, mostly. These boys are not too funny (they are economists) but they put in serious hours on this site and it is worth reading. Johnson is a Brit former IMF economist with perspective. Updated daily.

John Kay
About Britain and micro-economic issues. Research-heavy analysis rather than opinion. One of the few people with really clear ideas on bank regulation, but not yet (for me) fully thought through.

Krugman
Posts multiple times a day cos he’s manic. I was at a boring conference with him where he appeared to take frantic notes. Later transpired all he had written on his pad was ‘I need a beer’, about one hundred times. Still got Nobel.

Martin Wolf (FT sub needed)
Particularly good on Europe. During his life, Wolf has fallen in love with — and then become disillusioned by — the Labour Party, the World Bank, and perhaps now globalisation. The constant is his hunger for answers.

The Big Lychee
About Hong Kong. Affiliated with Hemlock, the exquisitely misanthropic, underemployed, billionaire’s gweilo running dog. Original Hemlock files available. Updated every day, because the author has a huge salary and nothing better to do.